[vc_row][vc_column width=”2/3″][vc_column_text]Potential investors are always looking for options to invest better and safer. However, they worry that the instability in markets like stocks and bonds might not be the most ideal place to invest in. It is even more difficult for first-time investors as they lack the experience to make quick and efficient decisions. In this article, let’s get more information about real estate as an investment option.[/vc_column_text][vc_row_inner][vc_column_inner][vc_column_text]
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Excellent returns
It is a fact that real estate gives good returns is common knowledge. Although the duration for returns is longer for real estate, it is compensated by the fact that it is a definite return and there is generally no risk of loss.
In fact, try comparing the returns of stock investments and the revenue from a real estate investment after 10 or 15 years. You will find that the overall returns are higher for a real estate investment itself. If you are willing to play the long game, you are sure to be rewarded for your success.
More control
You have more control over a property when compared to intangible assets like stocks. The stock market is also unpredictable and a lot of things are out of control. There are instances where the value of stock dropped overnight and the increase in the value took lots of time.
Contrary to that, real estate is, for the most part, in your control. Most of the time, you can predict the increase or decrease in the value of assets beforehand. Also, there is no sudden drop in the value of a property.
Another source of control you have over your investment is that a property is a tangible asset. What this means is that the unreliability of the seller or the broker is a minor factor. After all, stocks are numbers on a screen so if false information was communicated to you, it would take a tremendous amount of effort to find out that mistake. That is one of the reasons why most people don’t prefer to invest in the stock market and prefer the real estate market instead.[/vc_column_text][vc_column_text]
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They always have value
It often happens in the stock market and other investment ventures that the value of the asset you invested in becomes zero. This never happens with the real estate industry. No matter how bad the market position might be, there is always a minimum price for the property, so the loss is minimized.
A source of passive income
For people who already have a residence and are looking for a passive income, a real estate is a perfect option. Renting an apartment or home is the most stable form of income that can be generated. Additionally, the residents will take care of the premises on your behalf.
When you sell your property is when your passive income stops but that is also when your initial capital and profit is returned to you so it doesn’t matter, because you are open to investing in better ventures.
Tax benefits
Apart from the passive income and long-term profits, there is another advantage to investing in housing real estate. Tax benefits like deductions in payment of up to 2 lakhs can be claimed by a house owner in the income tax department. Apart from directly saving you money, it creates positive change in people to pay taxes.[/vc_column_text][vc_column_text]
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Government initiatives
It is a well-known fact that the state government is taking many steps to increase the number of homeowners in the city. Increase in real estate leads to an increase in the standard of living, which increases foreign investment. This cycle keeps repeating and that is what the government wants.
RERA is a good example of such initiatives. RERA completely eliminates the risk that a homeowner faces during and after a purchase. It also enforces laws in a more effective manner.
Diversified investment
Anyone who is interested in investments will know that diversifying the type of investment increases stability. If you only invest in stocks, then a sudden change in the market might cause devastating loss to your finances. This is the case with any other investment, so diversifying your investment is necessary.
Financial advisors suggest real estate as an alternative investment as it is the safest option among the rest and it also acts as leverage. In the worst case scenario where nothing goes well, real estate is always there to fall back on.[/vc_column_text][vc_column_text]
[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_column_text](i) Leverage
Not having liquidity (cash to spend) is the only disadvantage that real estate investment is said to have. However, that flaw is compensated by the fact that real estate offers leverage (collateral for a loan).
Besides the fact that it is used as collateral for loans, it is also a symbol of authority and a safety net, if all other investments fail. Owning real estate passively provide fellow investors with confidence in you in other ventures. For example, if you are investing in a certain company, other investors will feel confident in investing in the same project because you have a real estate to provide compensation in case of losses.
(ii) Standard of living
A real estate investment like an apartment or a villa is a hard asset. In case of emergencies, they are present to maintain the living standard you are currently in. It also provides passive income and collateral for loans.
(iii) Wealth creation medium
Although renting to gain passive income is an age-old process, nowadays new methods to improve cash flow have come up. Leasing a building for a business and taking a percentage of profits is the trend that is followed by small scale industries. It is a win-win situation for both you and the business owner. Charging rent and reducing the percentage of profit you will gain is a way to reduce instability and generate fixed cash flow.
Value only increases over time
If you observe the value of land in the last 50 years, you will notice that it has only increased in the time that has passed. The value of real estate ONLY INCREASES over time.
Yes, it is true that sometimes the selling price is less than the cost price. That is because you intend to sell it at the wrong time. By understanding the market cycles you will be sure to make a profit in your investments.[/vc_column_text][vc_column_text]
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Market cycles
Although this might sound technical, try to make the best out of it. Understanding the real estate market cycle can boost your chances of making better profits while minimizing losses. “It helps you buy low and sell high.”
A real estate market cycle consists of 4 phases. They are Recovery, Expansion, Hyper Supply, and Recession. Not to go into detail but understanding which phase the market is in right now will improve the chances of you making most profits.
(i) Recovery
This is the first phase of the market cycle and its key identifiers are low demand and slow dental growth. That said, it is different from a recession as new market trends start to emerge and there is an increase in the number of property viewings. This is the best time to invest in properties as prices are low but about to rise.
(ii) Expansion
This is the phase in which growth becomes clear in the market and more people start to invest. This is also a good time to invest in real estate as the prices are still increasing. The identifiers for this phase are that the rents are high and the vacancy is low.
(iii) Hyper supply
This is the phase in the cycle where the prices start to go down as the supply is high and the demand is low. If the builders don’t take this as a warning, the market value will drop drastically leading to recession.
(iv) Recession
Sometimes real estate developers don’t see the warning signs and go ahead with their projects even when there is no demand. This leads to a recession and it could take years for this to pass over and move back into the recovery phase. Until then, the prices remain constant with little fluctuations.[/vc_column_text][vc_column_text]
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Invest NOW
As of 2019, Hyderabad is in the expansion phase right now with the prices increasing steadily. This is a good time to invest, but with so many options where do you invest in it is challenging to pin down the best option.
MUPPA offers premium villas and apartments at affordable prices. They have projects like MUPPA’S Indraprastha and MUPPA’S Alankrita. They are located in on-demand areas like Tellapur and Narsingi. For proof of excellence, visit their projects and you are sure to be convinced.
Conclusion
No investment is completely risk-free, but the advantage of real estate is that there is always a comeback. Right now is the perfect time to invest in real estate so if you are hoping to get you and your family home or looking for a source of passive income, act now.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_column_text el_class=”post-contact-form”][fc id=’2′ align=’center’][/fc][/vc_column_text][/vc_column][/vc_row]